Revenue Revenue Management and Management and

Reservation Reservation SystemsSystems

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ObjectivesObjectives

• Outline the different types of Outline the different types of reservations and describe reservations and describe reservation inquiries and their reservation inquiries and their distribution channels.distribution channels.

• Gain an understanding revenue Gain an understanding revenue management and how forecasting is management and how forecasting is critical to the success of an critical to the success of an operation.operation.

What is a reservation?What is a reservation?

• Advance booking to reserve space Advance booking to reserve space for a designated time.for a designated time.– RestaurantsRestaurants– HotelsHotels– AirlineAirline– Cruise ShipsCruise Ships

Reservation Sales Planning Reservation Sales Planning ProcessProcess• Committing rooms for the futureCommitting rooms for the future

– Months or Years in AdvanceMonths or Years in Advance– Foundation of Revenue ManagementFoundation of Revenue Management

• Guest MixGuest Mix– Group GuestGroup Guest– Transient GuestTransient Guest

• Group AllocationGroup Allocation– Rooms allocated for group useRooms allocated for group use

Group ReservationsGroup Reservations

• Group BlockGroup Block– Rooms set aside for a groupRooms set aside for a group

• BookedBooked– Blocked rooms that are reservedBlocked rooms that are reserved

• Cut-Off DateCut-Off Date– Unreserved rooms released at Unreserved rooms released at

predetermined datepredetermined date

Hotel StatisticsHotel Statistics

• Occupancy %Occupancy %

• Average Daily RateAverage Daily Rate

ForecastingForecasting

• What is Forecasting?What is Forecasting?– An approach to determine what the An approach to determine what the

future holds.future holds.

Forecasting Room Forecasting Room AvailabilityAvailability

• Why Forecast?Why Forecast?– Foundation for making Pricing DecisionsFoundation for making Pricing Decisions– Departmental SchedulingDepartmental Scheduling

Forecasting DataForecasting Data

• Forecasting relies on historical dataForecasting relies on historical data– Takes the guesswork out of forecastingTakes the guesswork out of forecasting

Revenue ManagementRevenue Management

• Techniques used to determine whether Techniques used to determine whether prices should be raised or lowered.prices should be raised or lowered.

• Determines whether a reservation should Determines whether a reservation should be accepted or rejected.be accepted or rejected.

• Supply and DemandSupply and Demand– Raise rates when demand exceeds supplyRaise rates when demand exceeds supply– Lower rates when supply exceeds demandLower rates when supply exceeds demand

Elements of Revenue Elements of Revenue ManagementManagement• Group Room SalesGroup Room Sales

• Transient Room SalesTransient Room Sales

• Food & Beverage ActivityFood & Beverage Activity

• Local and Area Wide conventionsLocal and Area Wide conventions

• Special EventsSpecial Events

High Demand TacticsHigh Demand Tactics

• Close or restrict discountsClose or restrict discounts

• Apply minimum length of stay Apply minimum length of stay restrictions carefullyrestrictions carefully

• Reduce group room allocationsReduce group room allocations

• Raise rates to be consistent with Raise rates to be consistent with competitorscompetitors

Low Demand TacticsLow Demand Tactics

• Sell value and benefitsSell value and benefits• Offer packagesOffer packages• Keep discount categories openKeep discount categories open• Encourage upgradesEncourage upgrades• Offer stay-sensitive price incentivesOffer stay-sensitive price incentives• Remove stay restrictionsRemove stay restrictions• Involve your staffInvolve your staff• Lower ratesLower rates

Types Of Reservation Types Of Reservation SystemsSystems

• Property-Level Reservation SystemsProperty-Level Reservation Systems

• Central Reservations Systems (CRS)Central Reservations Systems (CRS)

• Global Distribution Systems (GDS)Global Distribution Systems (GDS)

• Internet Distribution Systems (IDS)Internet Distribution Systems (IDS)

Property Level Property Level Reservation SystemsReservation Systems• Reservations module of the Property Reservations module of the Property

Management System (PMS).Management System (PMS).

• Designed for individual propertiesDesigned for individual properties

Central Reservations Central Reservations Systems (CRS)Systems (CRS)

• A reservations system in which each A reservations system in which each participating property is represented participating property is represented in a computer system database.in a computer system database.

• Two types of CRS Two types of CRS – Affiliate Reservation SystemAffiliate Reservation System

•Chain PropertiesChain Properties

– Non-Affiliate Reservation SystemNon-Affiliate Reservation System• Independent PropertiesIndependent Properties

Starwood CRSWestin

Providence

Sheraton Airport

Westin Waltham

Sheraton Boston

CRS FunctionsCRS Functions

• Services are provided by the Central Services are provided by the Central Reservations Office (CRO).Reservations Office (CRO).

• Rates are provided by the Rates are provided by the participating properties.participating properties.

• Responsibility and control of the CRS Responsibility and control of the CRS lies with managers at the property lies with managers at the property levellevel

Global Distribution Global Distribution Systems (GDS)Systems (GDS)• Developed by the AirlinesDeveloped by the Airlines

• Links together:Links together:– Hotel CRSHotel CRS– Airline Reservation SystemsAirline Reservation Systems– Car Rental Reservation SystemsCar Rental Reservation Systems– Travel Agency CompaniesTravel Agency Companies

GDS SystemsGDS Systems

• SabreSabre

• GalileoGalileo– UnitedUnited

• AmadeusAmadeus– Air FranceAir France

• WorldSpanWorldSpan

Global Distribution

System

GDS

Starwood CRS

Marriott

CRS

Choice Hotels

CRS

Internet Distribution Internet Distribution SystemsSystems

• Electronic ReservationsElectronic Reservations

• Consumer OrientatedConsumer Orientated

• Provides a greater distribution of Provides a greater distribution of inventory.inventory.

• Examples:Examples:– Travelocity.comTravelocity.com– Hotels.comHotels.com– Priceline.comPriceline.com

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